01-07-00
Letter Agreement No. 8
DAC 96-29-M
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Federal Express Corporation (Federal Express) and McDonnell Douglas Corporation,
a wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 8 shall
constitute a part of said Agreement.
In anticipation of potential FAA future requirements, MDC agrees to install
certified smoke detection systems in the Aircraft subject to the following terms
and conditions:
1. UPPER CARGO COMPARTMENT
a) MDC shall install a certified one-minute smoke detection system in
the upper main cargo compartment of MD-10 (ACF configured) Aircraft.
The certification basis and detailed design shall include use of the
Whittaker model 602 one-minute smoke detector (the "One-Minute
Detectors").
b) For all Aircraft that are to receive the ACF Modification and that
are Delivered in a passenger configuration, the One-Minute Detectors
for the upper cargo compartment shall be provided by MDC as Seller
Furnished Equipment (SFE)
c) For all Aircraft that are to receive the ACF Modification and that
are Delivered in a freighter configuration, the One-Minute Detectors
for the upper cargo compartment shall be provided by FedEx as Buyer
Furnished Equipment (BFE)
2. LOWER CARGO COMPARTMENTS
a) MDC shall continue to install a certified five-minute smoke detection
system in the lower forward cargo compartment in accordance with
Exhibit B. - Passenger to Freighter Modification (ER 95-051).
b) For all Aircraft that are to receive the ACF Modification and the
Passenger to Freighter Modification as noted in Exhibit O - Schedule,
MDC shall install a certified five-minute smoke detection and fire
suppression system in the lower center and aft cargo compartments
concurrently with the accomplishment of the P to F and ACF
Modifications at an additional charge to FedEx of [ * ].
c) For all Aircraft that are to receive the ACF Modification only as
noted in Exhibit O - Schedule, FedEx shall be responsible for
installing the smoke
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detection and fire suppression systems in the center and aft cargo
compartments either by contracting directly with a FedEx
subcontractor prior to Delivery or directly with MDC, or its
subcontractor, via the ASR process during the Aircraft Visit.
d) MDC shall be responsible to provide the One-Minute Detectors for the
lower forward cargo compartment for those Aircraft in which the lower
galley is removed during the Passenger to Freighter modification.
FedEx shall be responsible to provide the One-Minute Detectors for
the lower forward, center and aft cargo compartments as BFE for all
other Aircraft.
3. Aircraft that are configured for CRAF and/or animal charter operation
("Charter Aircraft") shall be certified with a five-minute smoke detection
system for the upper and lower cargo compartments.
4. In all cases where the five-minute smoke detector system is installed, MDC
shall (i) obtain FAA approval for the One-Minute Detector to be an
equivalent part to the existing five minute detectors without change to
the five-minute system certification, which approval will preclude the
intermix of one-minute and five-minute detectors, and (ii) install the BFE
or SFE, as applicable, One Minute Detectors in the lower forward, center
and aft cargo compartments during the ACF Modification at no additional
charge to FedEx.
5. MDC shall install the one-minute smoke detection system on all flight test
Aircraft prior to Redelivery to Federal Express. Federal Express shall be
responsible for providing a complete shipset (all upper and lower
compartments) of One-Minute Detectors as BFE for fuselage 444.
6. All of the terms of the Agreement shall remain in full force and effect,
except as herein expressly changed, modified or supplemented, or except
insofar as the terms thereof have been completed, performed or complied
with prior to the date hereof.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
FEDERAL EXPRESS CORPORATION MCDONNELL DOUGLAS CORPORATION
/s/ JAMES R. PARKER /s/ CHARLES STREITZ
--------------------------- -----------------------------
Signature Signature
JAMES R. PARKER CHARLES STREITZ
--------------------------- -----------------------------
Printed Name Printed Name
VICE PRESIDENT CONTRACTS MANAGER
--------------------------- -----------------------------
Title Title
1-14-00
-----------------------------
Date
* Blank space contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.
01-07-00
Letter Agreement No. 11
DAC 96-29-M
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 11 shall
constitute a part of said Agreement.
FedEx and MDC have previously come to an agreement on certain wiring changes
which are to be accomplished on all Aircraft during completion of the Services.
These wiring changes consist of the Sundstrand enhanced electrical system (the
"EPC Wiring") and replacement of a substantial portion of the wiring in the
non-pressurized sections of the airframe (the "External Wiring), and have been
documented in Amendment No. 1 to the Agreement dated January 27, 1999.
In addition to the EPC Wiring and External Wiring changes noted above, FedEx and
MDC agree to substantially replace the wiring in the pressurized sections of the
airframe as defined by the list included herein as Attachment A (the "Internal
Wiring"). As a result of accomplishing the replacement of the Internal Wiring,
effectively the only wiring remaining on the Aircraft that will not have been
replaced, by virtue of one or all of the EPC Wiring, External Wiring or Internal
Wiring changes, will be the power feeder cables connecting from the Electrical
Power Center (EPC) to the engines, Auxiliary Power Unit (APU) and Air Driven
Generator (ADG). Any wiring not listed in Attachment A which is part and parcel
to Line Replaceable Units (LRUs) will also remain unchanged.
MDC hereby agrees to replace the Internal Wiring on the Aircraft during the
accomplishment of the Services on each Aircraft, excluding Flight Test Aircraft
fuselages 138 and 444, subject to the following terms and conditions:
1. In consideration of MDC accomplishing the replacement of the Internal
Wiring on the Aircraft, the Price to be paid to MDC by FedEx upon
Redelivery of the Aircraft shall be increased by an amount equal to [ * ],
subject to escalation in accordance with Exhibit N to the Agreement.
2. MDC shall develop a standardized wire harness by incorporating the changes
associated with the replacement of the EPC Wiring, External Wiring and
Internal Wiring such that substantially the same wire harness assemblies
are installed on each Aircraft (the "Standard Wire Harness"). FedEx and
MDC have jointly developed a mutually agreed to list of FedEx EOs,
included herein as Attachment B, that are to be included for potential
interface on any given Aircraft as part of the Standard Wire Harness
design configuration (the "Standard ACF Configuration"). [ * ] FedEx shall
be responsible for the adaptive engineering to revise the FedEx EOs in
Attachment B to coincide with the MDC design at a
Page 2
mutually agreed interface point. If an Aircraft is Delivered with a given
EO in Attachment B incorporated, then MDC shall retain and re-connect such
installations at no additional charge to FedEx. If an Aircraft is
Delivered without a given EO in Attachment B incorporated, and FedEx
elects to install such EO on that Aircraft, then MDC shall accomplish such
EO and charge FedEx via the ASR process.
3. FedEx acknowledges that as a result of the changes associated the EPC
Wiring, External Wiring, Internal Wiring, Standard ACF Configuration and
the Standard Wire Harness, MDC will essentially remove indiscriminately
all wiring from the Aircraft, except for the wiring noted above, prior to
installing new wiring in the Aircraft during the accomplishment of the
Services. As a result, it is possible for wiring to be removed from any
given Aircraft that is associated with installations that were installed
by MDC, FedEx or the prior owner(s) of the Aircraft after such Aircraft
was delivered by MDC to the original owner and that are not part of the
Standard ACF Configuration or the Standard Wire Harness ("Unique
Installation"). If a Unique Installation is encountered in the process of
accomplishing the Services, FedEx can request for MDC to include such
Unique Installation into that Aircraft's configuration at additional
charge to FedEx via the ASR process. Notwithstanding the terms of this
Paragraph, at no additional charge to FedEx MDC shall install all wiring
that is in excess of that listed in Attachment A which is otherwise
required for MDC's accomplishment of the Services in accordance with the
Agreement.
4. All of the terms of the Agreement shall remain in full force and effect,
except as herein expressly changed, modified or supplemented, or except
insofar as the terms thereof have been completed, performed or complied
with prior to the date hereof.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
FEDERAL EXPRESS CORPORATION MCDONNELL DOUGLAS CORPORATION
/s/ JAMES R. PARKER /s/ CHARLES STREITZ
---------------------------- -----------------------------
Signature Signature
JAMES R. PARKER CHARLES STREITZ
---------------------------- -----------------------------
Printed Name Printed Name
VICE PRESIDENT CONTRACTS MANAGER
---------------------------- -----------------------------
Title Title
1-14-00
-----------------------------
Date
* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.
11-18-99
Letter Agreement No. 13
DAC 96-29-M
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 13 shall
constitute a part of said Agreement.
This Letter Agreement No. 13 provides notice to FedEx that fuselage 4, Factory
Serial Number 46600 (the "MAE Aircraft"), shall receive the ACF Modification at
ST Mobile Aerospace, Inc. (MAE) located in Mobile, AL. MDC acknowledges that
FedEx desires to contract directly with MAE to accomplish any non-routines that
arise during the accomplishment of the ACF Modification, or for maintenance
actions that were deferred during the accomplishment of the P to F modification
while the Aircraft was at Aeronavali in Venice, Italy (collectively the
"Specified Services"). MDC also acknowledges that FedEx intends to contract
directly with MAE to accomplish the Specified Services concurrently with the
accomplishment of the ACF Modification by MAE under separate contract with MDC.
MDC hereby agrees to the reduction in work scope resulting from FedEx or its
subcontractor accomplishing the Specified Services subject to the following
terms and conditions:
1. MDC agrees to waive the requirement that FedEx contract through MDC for
the accomplishment of the Specified Services [ * ].
2. The induction of the MAE Aircraft into Mobile, AL at the MAE facility for
commencement of the ACF Modification shall be August 25, 1999. The
Redelivery Date of the MAE Aircraft shall be May 21, 2000. FedEx shall be
responsible for ensuring that the Federal Express Supplied Parts required
to support the accomplishment of the Specified Services are delivered to
MAE in accordance with the requirements stipulated in the Agreement.
3. FedEx hereby irrevocably and unconditionally waives any of MDC's
warranties which are exclusively related to workmanship and only for the
portion of the Specified Services on the MAE Aircraft exclusively
performed by FedEx or its subcontractor, provided, however, nothing in
this Section 3. shall extend to or otherwise affect warranties which may
be applicable to Parts.
4. The performance of the Specified Services by FedEx or its subcontractor
shall in no manner change, modify, terminate or otherwise affect MDC's
warranties regarding the MAE Aircraft or in any manner whatsoever modify
the terms and conditions of the Agreement except as expressly set forth
herein.
Page 2
5. FedEx and MDC mutually acknowledge that a potential resource conflict
exists as a result of MAE entering into two separate contracts to
accomplish work concurrently on one aircraft. FedEx and MDC agree to
mutually develop a priority of tasks, and mutually resolve any resource
conflicts that arise to prevent any materially adverse impact to the MAE
Aircraft Redelivery Date. If a resource conflict arises, then the party
identifying the conflict shall immediately notify the other party. If the
resource conflict cannot be resolved within two days of notification of
the conflict by MDC or FedEx, and such conflict results in a delay of
MDC's or FedEx's ability to accomplish the services in accordance with the
scheduled planning in MDC's or FedEx's respective contract with MAE, then
any resultant delay in the Redelivery Date will constitute an Excusable
Delay as defined in the Agreement.
6. Should there be a delay to the flight test activity on the MAE Aircraft
that is directly attributable to a delay caused by the accomplishment of
the Specified Services by FedEx or its subcontractor, and (i) FedEx has
not initiated appropriate action, and (ii) the parties agree that such
delay can be cured more expeditiously by MDC providing resources or parts
on behalf of FedEx or its subcontractor; then MDC shall have the right to
provide such resources or parts provided that the costs associated
therewith are mutually agreed upon by the parties via the ASR process
prior to such services being performed by MDC. MDC shall provide FedEx
with timely notice of such potential delay in order for FedEx or its
subcontractor to initiate any appropriate action.
7. All of the terms of the Agreement shall remain in full force and effect,
except as herein expressly changed, modified or supplemented, or except
insofar as the terms thereof have been completed, performed or complied
with prior to the date hereof.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
FEDERAL EXPRESS CORPORATION MCDONNELL DOUGLAS CORPORATION
/s/ JAMES R. PARKER /s/ CHARLES STREITZ
---------------------------- -----------------------------
Signature Signature
JAMES R. PARKER CHARLES STREITZ
---------------------------- -----------------------------
Printed Name Printed Name
VICE PRESIDENT CONTRACTS MANAGER
---------------------------- -----------------------------
Title Title
12-1-99
-----------------------------
Date
11-03-99
Letter Agreement No. 14
DAC 96-29-M
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 14 shall
constitute a part of said Agreement.
This Letter Agreement No. 14 incorporates a revised Exhibit O - Schedule dated
11-08-99 to the Agreement, enclosed herein as Attachment A, which reflects
mutually agreed revisions to the Delivery and Redelivery Dates, fuselage number
sequencing and modification site allocations.
MDC and FedEx agree to the accomplishment of the Services in accordance with the
above noted revised Exhibit O subject to the following terms and conditions:
1. MDC assumes that one Module 5 and one Module 1 kit will both be utilized
on an Aircraft of Option Block 3 which is to be Delivered to Mobile
Aerospace in Mobile, AL (MAE) by no later than May 2003 for commencement
of the Services. [ * ]
2. If FedEx elects not to exercise another block of Option Aircraft, or does
not include an Aircraft that needs the above noted parts in their next
option block [ * ].
3. The price to FedEx for the Passenger to Freighter Modification for each of
fuselage numbers 207, 271, 353 and 321 (the "Advanced Aircraft") shall be
[ * ]. When FedEx exercises the block of Option Aircraft that includes
Aircraft fuselage numbers 3, 5, 12 and 13 (the "Required Option Block"),
then [ * ] of the Premium Amount per Aircraft shall be refundable (the
"Refundable Amount"). Within 30 days of FedEx's exercise of the Required
Option Block, MDC shall issue a refund check to FedEx for the Refundable
Amount for each of the four Advanced Aircraft. If FedEx does not exercise
the Required Option Block prior to the termination of the Agreement, the
entire Premium Amount shall be non-refundable.
4. The Delivery Dates and corresponding Redelivery Dates for Aircraft
fuselage number 298 and fuselage number 351 have been extended to the new
dates shown in Attachment A. FedEx shall be charged the price for the
Passenger to
Page 2
Freighter and ACF Modifications for the two noted Aircraft in accordance
with Exhibit K to the Agreement, subject to escalation in accordance with
Exhibit N of the Agreement.
5. For Aircraft Delivered to OAN subsequent to the two Aircraft noted in
Paragraph 4 above, which are specified by Exhibit O to receive the P to F
as well as the ACF Modifications (the "Subsequent Aircraft"), FedEx shall
provide [ * ] written notice to MDC prior to the Delivery of any
given Subsequent Aircraft that (i) FedEx intends to accept Redelivery of
the Aircraft, ferry that Aircraft to a FedEx designated location, have the
ACF line replaceable units itemized in the list included herein as
Attachment B ( the "ACF LRUs") removed by MDC, and place that Aircraft
into storage (the "Storage Aircraft"), or (ii) FedEx intends to accept
Redelivery of the Aircraft with a new shipset of ACF LRUs for entry of
that Aircraft into the FedEx revenue fleet (the "Revenue Aircraft").
6. The first Subsequent Aircraft designated by FedEx as a Storage Aircraft
shall be the First Rotable Aircraft, and the next Aircraft after the First
Rotable Aircraft Delivered to OAN shall be automatically designated the
Second Rotable Aircraft. These two noted Aircraft shall be Redelivered to
FedEx with the full shipset of ACF LRUs installed. After FedEx ferry of
each of these noted Aircraft to a FedEx designated storage location, MDC
shall remove, inventory, and ship the ACF LRUs to OAN for use as a rotable
Redelivery shipset (the "Rotable ACF LRU Set") for use on subsequent
Storage Aircraft. FedEx shall be charged [ * ] associated with the return
of the ACF LRUs to Aeronavali in Venice, Italy (OAN) via the ASR process.
[ * ]. The price for the First Rotable Aircraft and Second Rotable
Aircraft shall be as noted in Exhibit K, [ * ] (the "ACF LRU Price") for
the price of the ACF LRUs, with the remaining balance subject to
escalation in accordance with Exhibit N of the Agreement. With respect
to the two Rotable ACF LRU Sets referred to herein, at the Redelivery of a
Storage Aircraft, the applicable Rotable ACF LRU Set shall be considered
not Redelivered until it is Redelivered to FedEx installed in either the
Next-to-Last Subsequent Aircraft or the Last Subsequent Aircraft in
accordance with Paragraph 9. of this Letter Agreement. As such, issues
regarding risk of loss, risk of damage or warranty associated with
component(s) of the Rotable ACF LRU Sets:
a) Prior to Redelivery to FedEx, shall be resolved in accordance with
Article 8 - Warranty and Article 22-Insurance as if the component(s)
in question from the applicable Rotable ACF LRU Set was not yet
Redelivered to FedEx.
b) After Redelivery to FedEx installed in either the Next-to-Last
Subsequent Aircraft or the Last Subsequent Aircraft, shall be
resolved in accordance with Article 8 - Warranty and Article 22 -
Insurance as if the component(s) in question from the applicable
Rotable ACF LRU Set was Redelivered to FedEx.
Page 3
7. Subsequent Aircraft to the First Rotable Aircraft and Second Rotable
Aircraft, which have been designated by FedEx as Storage Aircraft in
accordance with Paragraph 5. above, shall be Redelivered to FedEx
utilizing one of the two Rotable ACF LRU Sets noted above, subject to the
following:
a) The price for Storage Aircraft shall be as noted in Exhibit K, less
the amount of the ACF LRU Price, with the remaining balance subject
to escalation in accordance with Exhibit N of the Agreement.
b) If MDC can successfully defer, [ * ]. FedEx agrees to purchase the
ACF LRUs for each applicable Storage Aircraft from MDC at the ACF
LRU Price by no later than [ * ] after Redelivery of each such
Storage Aircraft to FedEx. The ACF LRU Price shall be subject to
escalation in accordance with Exhibit N of the Agreement.
i) FedEx shall provide MDC written notice by [ * ] of its intent
to designate the first or more Subsequent Aircraft as Storage
Aircraft. MDC shall negotiate in good faith with its ACF LRU
suppliers to defer the ACF LRUs for those designated Storage
Aircraft in such a manner to mitigate FedEx's liability as noted
in Paragraph 7.c) below.
c) If MDC is unable to defer shipment of a given set of ACF LRUs for any
Subsequent Aircraft, then MDC shall retain in storage each such set
of ACF LRUs, and FedEx shall be charged MDC's inventory holding costs
at a rate not to exceed [ * ] per month (which shall be verified by
MDC outside auditors upon request) for the storage of each such set
of ACF LRUs, which amount shall not be subject to escalation. If
requested by FedEx, MDC shall provide documentation to the
satisfaction of FedEx to verify MDC's receipt of each set of ACF LRUs
for which FedEx is being charged. The noted charges shall accrue from
the time the applicable Storage Aircraft is Redelivered to FedEx
until FedEx purchases the applicable ACF LRUs from MDC. [ * ]
d) After ferry of the Aircraft by FedEx to a FedEx designated storage
location, MDC shall remove, inventory, and ship the Rotable ACF LRU
Set to OAN for use on a subsequent Storage Aircraft. FedEx shall be
charged the direct pass through removal labor hours, packaging and
freight costs associated with the return of the Rotable ACF LRU Set
to OAN via the ASR process. [ * ]
e) FedEx shall provide to MDC either (i) [ * ] written notice if MDC
has no ACF LRUs sets in storage, or (ii) [ * ] written notice if
MDC has ACF LRUs sets in storage, of its intent to purchase a set
of ACF
Page 4
LRUs for use on a Storage Aircraft, including the First Rotable
Aircraft and the Second Rotable Aircraft, for FedEx's return of the
Storage Aircraft to revenue service.
8. Subsequent Aircraft which have been designated as Revenue Aircraft by
FedEx in accordance with Paragraph 5. above shall be Redelivered to FedEx
with a new set of ACF LRUs installed. [ * ]
9. The Next-to-last Subsequent Aircraft , as designated by FedEx at the
Delivery of any given Subsequent Aircraft, shall be Redelivered to FedEx
utilizing one of the two Rotable ACF LRU Sets, which shall remain
installed on the Aircraft and be retained by FedEx. Once the Next-to-last
Subsequent Aircraft has been designated, the following Subsequent Aircraft
shall be the Last Subsequent Aircraft, and shall be Redelivered to FedEx
utilizing the remaining Rotable ACF LRU Set, which shall remain installed
on the Aircraft and be retained by FedEx. FedEx shall be charged the price
for the Passenger to Freighter and ACF Modifications for these two noted
Aircraft in accordance with Exhibit K to the Agreement, subject to
escalation in accordance with Exhibit N to the Agreement.
10. Notwithstanding the terms of Letter Agreement No. 9, for all Subsequent
Aircraft designated by FedEx as Storage Aircraft, including the First
Rotable Aircraft and the Second Rotable Aircraft:
a) The Services specified on the initial issue of the MJCS for each
applicable Aircraft are to be performed concurrently with the P to F
and ACF Modifications and, except as may be mutually agreed to as
noted in Paragraph b) below, shall be limited to those items
specified in the MJCS Standard Tasks List, included herein as
Attachment C. FedEx may elect to contract the MJCS work tasks either
directly with MDC or directly with OAN. If FedEx elects to contract
the noted MJCS items directly with MDC, then the prices noted in
Attachments A and C to Exhibit K of the Agreement, or the ASR process
as applicable, shall be used to determine the pricing for each such
MJCS item.
b) Any MJCS Addendums issued after the initial issue of the MJCS for
each applicable Aircraft shall be subject to mutual agreement between
FedEx and MDC and MDC shall not unreasonably withhold concurrence of
such additional work items. FedEx shall limit such MJCS Addendums to
AD/FAR driven tasks which cannot be deferred or other tasks in which
deferral would add significantly to FedEx's total Aircraft costs to
return the Aircraft to revenue service.
c) It is acknowledged by MDC and FedEx that any ASRs requested by FedEx,
or any non-routines written by OAN in the course of accomplishing the
Services on the Aircraft, shall be deferred if possible to future
maintenance action, unless such ASR or non-routine is (i) considered
by FedEx to be a safety of flight item, (ii) is the result of an
AD/FAR action or other such mandatory item, (iii) or such non-routine
interferes with the accomplishment of the Services by MDC or its
subcontractor, or (iv) FedEx and MDC
Page 5
mutually determine that it is economically more efficient to
accomplish the item during the Services rather than during
maintenance action at a future date.
11. It is the intent of this Letter Agreement that only Aircraft that are to
receive the P to F and ACF Modifications at OAN are affected by the terms
described in Paragraphs 4 through 10 above inclusively. None of the
Aircraft that are to be modified at other facilities or are to receive
only the ACF Modification during their respective Aircraft Visit are
affected by the terms described in Paragraphs 4 through 10 above
inclusively, other than their respective Aircraft Positions and Aircraft
Visit time periods as noted in Attachment A herein.
12. [ * ]. Written notice to MDC for an Aircraft substitution as noted in
this Paragraph, executed by an officer of FedEx and submitted to MDC
in accordance with Article 11 - Notice of the Agreement, shall be deemed
to amend the Agreement accordingly with regard to the substitution of
such Aircraft.
a) Where specific fuselage numbers are cited in this Letter Agreement,
except Paragraph 3, it is the intent of this Letter Agreement that
the cited fuselage numbers are for reference to that Aircraft
Position's Aircraft Visit time period at OAN. If FedEx substitutes
one of the cited Aircraft by exercising its rights under the terms of
the Agreement, it is understood that the new Aircraft fuselage number
shall replace the old fuselage number in all instances as cited in
this Letter Agreement.
13. Notwithstanding the terms of Paragraph 12 above, FedEx acknowledges that
for fuselage numbers 298 and 351, FedEx has exercised its right to modify
the schedule as noted in Paragraph 2.C. of the Agreement. Any further
modifications to the schedule with respect to these two noted Aircraft
shall require approval from MDC.
14. If MDC or its subcontractors are able to demonstrate improvement to the
Aircraft Visit time period and Redelivery Dates for various Aircraft, such
that a given conversion facility could accept Delivery of an Aircraft on
an earlier date than the scheduled Delivery Date, then FedEx agrees to
Deliver the affected Aircraft at the earlier date.
a) Notwithstanding the foregoing, FedEx shall not be obligated to accept
early Redelivery of an Aircraft in cases where such early Redelivery
would cause the Redelivery Date to occur in an earlier FedEx fiscal
year (fiscal year ends May 31) than was budgeted by FedEx. FedEx
shall remain obligated to
Page 6
accept Redelivery of the Aircraft on the scheduled Redelivery Date in
accordance with Exhibit "O". attached hereto.
b) Notwithstanding any other provision, any payments required for early
Delivery and/or Redelivery which occur in a FedEx fiscal year in
which it was not originally scheduled per Exhibit "O" shall be made
in accordance with Exhibit "O" attached hereto.
15. MDC agrees to pay to FedEx a lump sum payment of [ * ] within five days of
execution of this Letter Agreement, which amount FedEx agrees shall be
payment in full for all FedEx's incremental costs at additional facilities
through December 31, 1999 and satisfies all of MDC's responsibilities in
accordance with item (ii) of the first sentence of Paragraph 5.A.3. and
Paragraph 5.A.3)b) of the Agreement, excluding MDC's responsibilities as
stipulated in Letter Agreement No. 9. Without affecting the terms and
conditions of Letter Agreement No. 9, which shall remain in full force and
effect, item (ii) of the first sentence of Paragraph 5.A.3. and Paragraph
5.A.3)b) shall no longer be applicable effective January 1, 2000 for the
conversion facilities located in Venice, Italy; Mobile, Alabama; Zurich,
Switzerland and Goodyear, Arizona. If MDC is contemplating the use of a
new facility other than those noted herein for accomplishment of the
Services, MDC shall coordinate such intent in a timely manner with FedEx
and FedEx shall identify and submit to MDC in a timely manner FedEx's
incremental costs (or cost basis) for support of such a new facility. MDC
shall not enter into an agreement for the accomplishment of the Services
with the operators of a new facility without the prior consent of FedEx as
stipulated in Paragraph 5.A.3) of the Agreement. Subject to FedEx's
consent as stipulated herein, MDC shall be obligated to provide to FedEx
the reimbursement of FedEx's incremental costs associated with the new
facility in accordance with Paragraph 5.A.3) of the Agreement, however
such reimbursement shall be limited to only those costs (or cost basis)
identified and submitted by FedEx to MDC prior to FedEx issuing such
consent as described herein.
16. This Letter Agreement is subject to MDC and OAN coming to an agreement
with respect to extending the Delivery Dates for fuselage numbers 298 and
351 as contemplated in Paragraph 4. above.
17. FedEx agrees to pay in full by wire transfer of funds the balance due
amounts noted in invoice numbers 506427-00 and 506428-00 within five days
of execution of this Letter Agreement.
18. MDC shall provide invoices for all charges for each Redelivered Aircraft
by no later than thirty (30) business days after the Redelivery of an
Aircraft commencing with all Aircraft Redelivered after the execution of
this Letter Agreement. FedEx shall not be responsible for charges against
the above noted Redelivered Aircraft discovered by MDC after the thirty
day deadline, except at FedEx's sole discretion.
19. MDC agrees that if FedEx needs to store an Aircraft prior to Delivery at
the applicable modification site noted in Exhibit O - Schedule, and the
applicable
Page 7
modification site cannot accommodate the storage of such Aircraft, then
FedEx shall store such Aircraft at the AMS, Inc. facility located in
Goodyear, AZ. MDC's and FedEx's responsibilities associated with the
subsequent ferry of such a stored Aircraft from Goodyear, AZ to the
specified modification site shall be in accordance with Letter Agreement
No. 9 as then currently stored Aircraft. The terms in this Paragraph 19.
assumes that storage of an incremental Aircraft at Goodyear, AZ by FedEx
does not exceed the maximum allowed number of stored Aircraft as
stipulated in the Agreement.
20. All of the terms of the Agreement, including any prior Letter Agreements
entered into by and between the parties, shall remain in full force and
effect, except as herein expressly changed, modified or supplemented, or
except insofar as the terms thereof have been completed, performed or
complied with prior to the date hereof.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
FEDERAL EXPRESS CORPORATION MCDONNELL DOUGLAS CORPORATION
/s/ JAMES R. PARKER /s/ CHARLES STREITZ
--------------------------- -----------------------------
Signature Signature
JAMES R. PARKER CHARLES STREITZ
--------------------------- -----------------------------
Printed Name Printed Name
VICE PRESIDENT CONTRACTS MANAGER
--------------------------- -----------------------------
Title Title
11-8-99
-----------------------------
Date
* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.
10-29-99
Letter Agreement No. 15
DAC 96-29-M
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 15 shall
constitute a part of said Agreement.
FedEx desires to utilize Flight Test Aircraft Fuselage 138 ("T1") for flight
testing of the Local Area Augmentation System (LAAS) as developed by the Federal
Aviation Administration (FAA). The flight tests for the LAAS shall be
accomplished on a non-interference basis concurrently with the flight test
program accomplished by MDC in support of the certification of the ACF
Modification.
MDC hereby agrees to allow the use of T1 for the noted FAA/FedEx flight test of
the LAAS subject to the following terms and conditions:
1. MDC acknowledges that the LAAS flight test procedure "Wide-Band Airport
Pseudolite (APL) Test Plan" dated October 1999, included herein for
reference only as Attachment A (the "LAAS Procedure"), shall be
accomplished by FedEx in conjunction with the FAA.
2. The LAAS Procedure shall be accomplished at Memphis International Airport
and shall consist of static tests as well as in-flight tests as noted in
the LAAS Procedure.
3. This Letter Agreement shall remain in effect until the completion of the
LAAS Procedure. The LAAS Procedure shall commence on 10-29-99 and proceed
in accordance with the LAAS Procedure, for approximately seven consecutive
days.
4. FedEx shall be responsible for the following:
a) Providing the LAAS Test Prototype (LTP) in the form of an FAA owned
LAAS testbed (the "LAAS Testbed"), as well as any other equipment or
instrumentation required for accomplishment of the LAAS Procedure.
b) Installation of the LAAS Testbed and other required equipment noted
in Paragraph 4.a) above shall utilize FedEx provided technical
personnel.
Page 2
c) Providing the ground maintenance crew for all required servicing and
routine maintenance of T1 during the LAAS Procedure.
d) Providing the necessary flight crew, other than pilot-in-command, for
the accomplishment of the LAAS Procedure, including the required
technical personnel for the operation of the LAAS Testbed equipment.
e) Providing all required aircraft fuel in support of the LAAS
Procedure.
f) All landing and parking fees incurred during the accomplishment of
the LAAS Procedure.
g) At the conclusion of the LAAS Procedure, removal of the LAAS Testbed
and all associated equipment from T1 utilizing FedEx provided
personnel.
5. MDC shall be responsible for the following:
a) Providing the pilot in command during the LAAS Procedure.
b) Providing flight test technical personnel for on board data
management during the LAAS Procedure.
c) Installation of necessary wiring and other accommodations as required
for the installation of the LAAS Testbed. (i.e. wiring for power
source and source for general aircraft data needed for the LAAS
Testbed and LAAS Procedure)
d) Providing project safety oversight for the LAAS Procedure.
e) All costs associated with the ferry of T1 in its flight from Mesa, AZ
to Memphis, TN for the LAAS Procedure, and the ferry of T1 in its
return flight from Memphis, TN to Mesa, AZ.
6. FedEx shall pay to MDC the amount of [ * ] in the aggregate for the total
per diem cost of MDC's personnel in Memphis in support of the LAAS
Procedure for a seven day period, which amount shall not be subject to
escalation. If the LAAS Procedure requires more than seven days, then
FedEx agrees to pay an additional [ * ] per day in per diem charges for
each day beyond the seventh day. In addition to the per diem charges
noted, FedEx shall be charged the actual touch labor hours required for
MDC to accomplish its responsibilities as outlined in Paragraph 5 above,
not to exceed [ * ]. The indicated amounts shall represent payment in full
for MDC's efforts in support of the LAAS Procedure. MDC shall submit an
invoice to FedEx itemizing the final charges, based on the calculations
stated in this Paragraph, after the conclusion of the LAAS Procedure.
7. All of the terms of the Agreement shall remain in full force and effect,
except as herein expressly changed, modified or supplemented, or except
insofar as the terms thereof have been completed, performed or complied
with prior to the date hereof.
Page 3
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
FEDERAL EXPRESS CORPORATION MCDONNELL DOUGLAS CORPORATION
/s/ RONALD D. WICKENS /s/ CHARLES STREITZ
--------------------------- -----------------------------
Signature Signature
RONALD D. WICKENS CHARLES STREITZ
--------------------------- -----------------------------
Printed Name Printed Name
VP, ADD STRATEGIC PROJECTS CONTRACTS MANAGER
--------------------------- -----------------------------
Title Title
10-30-99
-----------------------------
Date
* Blank spaces contained confidential information which has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.